Italy's Palumbo Group buys stake in Viktor Lenac shipyard

The Italian Palumbo Group based in Naples has, over the past few days, been buying shares in the Viktor Lenac shipyard and, as of the end of last week, owns just over 14 percent of the dock's shares, the Rijeka-based shipyard said on Wednesday.

The shipyard reported the change in its ownership structure and the percentage of voting rights to the Zagreb Stock Exchange. The stake was acquired in two transactions on May 9 and May 11, resulting in Palumbo acquiring a 14.04 percent stake in the shipyard.

The shipyard reported that the Palumbo Group bought the shares from the Pula-based Uljanik shipyard and the Zadar-based Tankerska Plovidba shipping company, meaning that their ownership shares in Viktor lenac have now dropped to under 30 percent. Tankerska Plovidba now has a 27.04 percent stake in the shipyard, with Uljanik holding 25.16 percent.

It was speculated earlier that Palumbo Group was one of the companies interested in investing in Uljanik. In early April, when Uljanik was looking for a strategic partner for its restructuring plan, Palumbo was one of the eight potential investors invited to submit bids.

Representatives of the Neapolitan company were also among the seven potential partners who had visited Uljanik's data room earlier this year, but the company eventually did not submit a bid to invest in Uljanik - which selected the Croatian company Kermas Energija instead.

Founded in 1967, Palumbo Group has over the years expanded from a small family-run business to a major shipbuilding business, specialising in building and repairing luxury yachts. The group owns seven shipyards around the Mediterranean - in Napoli, Monaco, Malta, and Ancona - and employs around 900 workers.

At Viktor Lenac, Palumbo's decision to buy the stake is seen as a welcome investment.

"The interest of investors from the shipbuilding industry certainly has an added value, as they can recognise and view all dimensions of our business in the right context," said CEO of Viktor Lenac, Aljosa Pavelin, told Poslovni Dnevnik.

Viktor Lenac is one of Croatia's major shipyards, which traces its history back to 1896 and today specialises in ship conversions and repairs. Among its clients is the US Navy, which serviced several of its ships there in recent years.

"Palumbo entering our ownership structure could represent an opportunity to create considerable synergy by merging our expertise, to provide better utilisation of our manufacturing capacity, and more efficient logistics. But the most important thing is the opportunity to merge our two client bases, something the clients and both companies could gain a lot from," Pavelin added.

In 2017 Viktor Lenac had a revenue of 514 million kuna (€69.6 million), or 70 percent up from 2016. Its net profit after taxes was 36.8 million kuna (€5 million), significantly up from 1.5 million kuna in 2016.